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Zundrbarian School of Economic Thought
The Zundrbarian School of Economics is a school of economic thought that derives its name from the Hill Dwarven economists- Bengren Battlehammer, Geruman Goldstone, Tyiarigg Cliffbreaker, Drombrek Bouldergem, and Muirduhr Goldmantle. Current research in the field is done by scholars at the University of Zundrbar, and there are many believers of the Zundrbarian School of Economics outside of the Principality of Zundrbar. The Zundrbarian School of Economics emphasizes the organizing power of the mechanism of prices and argue against mathematical organization of an economy on the grounds of the complexity of an individual's decision and the ever-evolving free market. Its proponents advocate the strong protection of private property rights and the strict enforcement of voluntary transactions between two or more parties. Further, its proponents argue that government intervention in commerce can cause great damage. They view government as utilizing regulations to further its own power, via the "Wheel of Tyranny Rule." The Wheel of Tyranny Rule states that, "Government regulators will cite problems in industries caused by regulations as justification for further regulations, causing further damage." They also advocate the abolition of legal tender laws and a decentralized banking system in which the banking industry is not dominated by a coercive monopoly or a central bank protected by the state. History Origins The origins of the Zundrbarian School of Economic Thought can be traced back to the economist, Thurmond Sootbeard, younger brother of Karlsefni Sootbeard. Thurmond is credited as being "The Father of Zundrbarian Economics," and also started the Economics Department of the University of Zundrbar. Thurmond published his first treatise on economics at the age of seventy nine, titled, "Treatise on the Natural State of Markets," in 1632. Thurmond went on to publish twenty-seven other treatises, which have since been packaged into books, known as the "Thurmond's Twenty Eight Treatises on Economics and State Coercion." The original copies of all twenty-eight essays are stored in the University of Zundrbar's Economics Wing. Thurmond's apprentice- Khardus Firestone, is regarded as being another major thinker in the Zundrbarian School of Economics, as one of the founding thinkers who recognized that economics is not about the amassing of data, but rather about the verbal communication of facts that are true in all cases. Khardus is renowned for having coined the phrase, "Wants are unlimited, means are scarce," which serves as the motto for the University of Zundrbar's Economics Department. The First Thinkers The first Zundrbarian Economist to reach a noteworthy status was Bengren Battlehammer. Bengren was the head of the Economics Department of the University of Zundrbar, and was a scholar in the works of Khardus Firestone and Thurmond Sootbeard. Bengren published a paper, expanding on the ideas of Firestone and Sootbeard, by the name, "The Fundamentals of Economics," which placed the theories of the two economists on higher ground. Bengren Battlehammer served as the tutor for the Crown-Prince Sven Sootbeard, who was due to inherit the throne after his regent, Johanna Steelhand (his mother) handed over the throne. Bengren's admirer and colleague at the University of Zundrbar, Geruman Goldstone, took Bengren's theories on economics, and advanced it by adding in a series of problems circulating around price, interest, capital, and value. His major subject of writing was on interest rates, exemplified in his magnum opus, "Fallacies on Interest," which analyzed historic fallacies on interest rates. One of his major quotes from the work that is remembered to this day is, "The rate of interest is not an artificial construct, but a cornerstone of the market." Geruman's apprentice, Tyriagg Cliffbreaker, continued his legacy by combating communist theories brought in by immigrants that spoke about the exploitation of capital. He served as finance minister to Princess Johanna in the waning years of her reign, arguing for balanced budgets, a maintaining of the gold standard, free trade, and the repealing of monopoly subsidies. Goldmantle and Bouldergem Muirduhr Goldmantle and Drombrek Bouldergem are regarded as being the most recognizable Zundrbarian economists. One of the major points not addressed by Bengren and Tyriagg was money. Thus, Goldmantle published the essay'', "Money and Credit," in 1790. Goldmantle's essay proved that money must always appear in the market. Goldmantle utilized ideas from Cliffbreaker, Goldstone, and Battlehammer to form the Zundrbarian Business Cycle Theory. Goldmantle was heavily involved in the University of Zundrbar, where an increasing number of immigrants from the Kingdom of Ironforge were beginning to bring up socialist ideas. Goldmantle published the work, The Fallacy of Socialism,'' in 1812, which highlighted that socialism's ban of private property prevents resources from being used to their most highly-valued use, and also predicted that socialism would end in civilization's end. Goldmantle's economics career was interrupted by his service in the Mountaineer Corps during the Third Troll War in Zundrkaap. He served as an artillery officer in the Vaal-laand during the war before returning to economics after the war. The immigration wave of the 1830s brought new cultures to Zundrbar, mostly from the outlying areas of Loch Modan, Dun Morogh, and the Wetlands. Goldmantle argued in favor of protecting the cultures of these immigrants, while immersing them into the Zundrbarian way of life. He also spoke out against the ever-growing influence of the Titanic religion in politics. Goldmantle's apprentice- Drombrek Bouldergem, continued the legacy as a renowned economist. Bouldergem is most regarded for his rivalry with a Bronzebeard economist by the name of Dalgram Cragbrow. Bouldergem published numerous books on exchange rates, capital theory, and monetary reform, which were distributed by Hill Dwarven traders across the Kingdom of Ironforge and the Seven Human Realms. Bouldergem became a resident of Ironforge where he often debated Cragbrow and his economic theories, which became known as Cragbrow Economics. Cragbrow Economics condoned fractional reserve banking (in contrast to full reserve banking), fiat currecy, central banking, and that the government should interfere in the market under the grounds that the free market did not always work. Notable Theories Inflation The Zundrbarian School of Economics argues in favor of a traditionalistic approach to inflation. The official definition of inflation is an increase in the units of currency or means of exchange in the money supply, which leads to higher prices for goods, assets, and services. As a result of inflation, the value of each monetary unit is eroded, causing it lose purchasing power, and further causing each individual unit to purchase fewer goods and services. Zundrbarian Economists cite state-sponsored central banks as the main cause of inflation in an economy, as the bulk of the money supply is created through debt. This means that the money supply is created by the central banking institution to supply money to the banking system when required by individual banks. The Zundrbarian Economists further cite the Cragbrow definition of inflation as not addressing the major point that each individual unit of currency loses purchasing power, rather than just having an increase in prices. Inflation is calculated via the "true money supply"- how many units of money are available for immediate use in exchange. Zundrbarian Economists cite inflation as one of the three ways the state can fund its operations, the other two being taxing and borrowing. As a result of inflation's destructive power, Zundrbarian economists support the abolition of central banks and the fractional-reserve system, advocating a return to a gold standard and free banking. The return to a gold or silver monetary system would ensure money supply growth, or inflation, would never spiral out of control. Monetary Reform The Zundrbarian School is one of the only schools of economics that advocates for the radical reform of monetary systems. Zundrbarian Economists view legal tender laws and fractional-reserve banking as having a disruptive influence on the economy. Furthermore, they oppose the bailing out of large banks via the use of scarce resources. Fractional Reserve Banking Zundrbarian scholars and bankers alike view fractional-reserve banking as inherently unethical and dysfunctional, viewing it akin to embezzlement. They support full-reserve banking, which requires banks to retain in reserve all deposits that are legally available for withdrawal and permit lending from only long-term deposits. Many followers of the Zundrbarian School of Economics hailing from outside the Principality of Zundrbar advocate for free reserve banking, in which banks are allowed to engage in fractional-reserve banking provided they comply with existing fraud laws and are not supported by bailouts in the case of a bank run and are thereby forced into bankruptcy when unable to pay back their debts. The difference is more based on culture, due to the rich banking heritage of the Principality of Zundrbar than on economics, as both match the beliefs of the Zundrbarian School of Economics. Business Cycles Business Cycles are another major aspect of the Zundrbarian School of Economics. Business Cycles expand upon the theory of inflation by stating that changes in money supply can have real effects on an economy, such as disrupting the price mechanism and causing a "ripple effect" through the economy. Zundrbarian Economists cite changes in the money supply and the associated credit cycle as the cause of most business cycles. They assert that central banks are at fault for this, as the inflating effects of the practice result in lower interest rates than would prevail in a stable monetary system. This causes excessive credit creation, speculative bubbles, and artificially low savings. Fractional Reserve Banking causes inflation via the decreasing of interest rates to a level that could not be sustained in a stable monetary environment. The money creation process in a fractional reserve banking system skews production to "unwanted" capital goods via the misallocation of resources, thereby encouraging Ponzi-like speculation. An artificial increase in the money supply leads to an unsustainable credit-fuelled boom, in which artifically-stimulated borrowing seeks out diminishing investment opportunities and causes widespread malinvestment, where capital resources are misallocated into areas that would not attract investment if the monetary supply remained stable. When credit cannot be sustained, a recession or "credit-crunch," occurs. Money supply sharply contracts when markets are finally clear from the artificial credit, and resources are allocated to more efficient uses. 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